Remitly Global, a Seattle-based mobile finance startup, debuted Thursday on the Nasdaq under the ticker “RELY” in its initial public offering.
Shares of the company closed at $48.45, up 12% from the day’s opening price, giving the company a market capitalization of approximately $7.8 billion. The stock opened the day up more than 20% from its IPO price of $43, higher than the expected $38-$42 range the company suggested last week.
“Today is an important milestone,” said CEO Matthew Oppenheimer in an interview. He said it was a key step along the company’s journey to “transform the lives of immigrants and their families by providing the most trusted financial services on the planet.”
The IPO was expected to raise $294 million for the company, based on the 7 million shares that were to be issued by Remitly. Existing stockholders were also expected to sell 5,162,777 shares in the offering, though proceeds from sales of those shares would not go to the company.
The company operates a mobile platform that allows people living in the United States, Canada and many European countries to send money abroad to countries in Africa, Asia, South America and more. Among its most popular markets on the receiving end: India, Philippines and Mexico.
Remitly says its service is cheaper and faster than most existing remittance options, with more than 75% of transactions in 2020 having been completed within an hour. The company earns money on the difference between what it charges customers and what it pays to execute transactions.
The company recorded $202 million in sales in the first half of 2021, up 92% from the same time period in 2020. The company is still unprofitable, losing $9.2 million in the first six months of 2021, an improvement from the $21.1 million loss it reported for the first six months of 2020.
Still, Oppenheimer called this moment the “early innings,” noting that Remitly had captured 1% of the $1.5 trillion in remittances sent by immigrants home in 2020. The company processed more than $16.1 billion in remittances for the 12 months that ended June 30.
“We’ve seen a number of companies go after this opportunity,” said Daniel Ives, managing director of Equity Research at New York-based Wedbush Securities. But Remitly has “created a massive brand in this market that’s fragmented [and] traditionally dominated by banks and brick and mortar locations.”
One of Remitly’s strongest competitors, Wise, a London-based company that facilitates cross-border payments, also went public earlier this year.
“We’re talking about a transformation of modern day banking,” Ives said, disrupting the brick and mortar model that has long dominated the sector. “It’s really almost a fourth industrial revolution.”
Remitly said it has grown from 750 employees at the start of 2019 to more than 1,600 employees as of June 30, many of whom are in Seattle. It leases more than 37,000 square feet of office space downtown.
The deal marks one of the largest recent public offerings in Washington. Earlier this year, Seattle-based Sana Biotechnology raised $587 million in an IPO. Last year, Vancouver-based ZoomInfo, a sales and marketing software company, raised $934 million in its own IPO.